The GOP's tax proposal is still a far cry from a flat tax without deductions... but it is simpler and reduces taxes for all Americans while shifting more of the burden to upper income earners than currently exists.
Here are the changes to the brackets:
Current: 10 percent, 15 percent, 25 percent, 28 percent, 33 percent, 35 percent, 39.6 percent
Standard deduction: $6,350
Proposed: 12 percent, 25 percent, 35 percent, 39.6 percent
Standard deduction: $12,200
Now let's compare individual income with the standard deductions. This is how it would work currently and going forward.
If you earn:
$25,000
- Current code: $2,331
- Proposed code: $1,536
- Savings: $795
$50,000
- Current code: $6,651
- Proposed code: $4,536
- Savings: $2115
$75,000
- Current code: $12,901
- Proposed code: $9,850
- Savings: $3051
The GOP proposed tax plan provides meaningful relief for the "middle-class" by any definition. Any argument to the contrary is incorrect and a demonstrable lie.
Currently the top tax rate of 39.6 percent kicks in for married couples filing jointly at $470,700. So, what would that couple pay today vs the new proposed code?
- Current code: $127,183
- Proposed code: $103,645
- Savings: $23,538
In other words, everyone benefits meaningfully prior to arriving at the top tax code of 39.6 percent.
This in turn shifts the burden further towards upper income earners.